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Can China's memory chips ease the 'RAMageddon' driving up device costs?

From ABC Australia · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News From a news agency New plan
  • China's CXMT, a memory chip manufacturer, has debuted on the stock market with a valuation exceeding $500 billion, aiming to boost production amidst global shortages.
  • The company is seen as crucial for China's ambition to build a self-sufficient AI chip industry and reduce reliance on South Korean and U.S. suppliers.
  • While CXMT could offer price advantages and diversify supply chains for companies like Apple, experts caution that easing supply strains may not automatically lower prices for consumer devices or memory chips.

China's hopes for an independent artificial intelligence memory chip supply are pinned on CXMT, a company whose recent stock market debut valued it at over $500 billion. This move aims to significantly ramp up production, potentially alleviating overseas data center-driven shortages that are currently inflating the costs of everyday electronic devices.

Shortages in … memory have become more difficult to resolve quickly. This is also why more consumer electronics companies are considering CXMT as an additional supplier.

— Ellie WangAn analyst at tech industry intelligence firm TrendForce commented on the increasing demand for alternative memory chip suppliers.

The global shortage of memory chips for consumer devices, a situation dubbed "RAMageddon," has intensified as manufacturers prioritize advanced chips for the booming AI industry's data centers. "Shortages in … memory have become more difficult to resolve quickly," noted Ellie Wang, an analyst at TrendForce. "This is also why more consumer electronics companies are considering CXMT as an additional supplier."

Tech giants like Dell, HP, and Apple are reportedly testing CXMT's memory chips, seeking alternative supply sources. "The appeal for CXMT chips is price," explained Sue Keay, director of the University of New South Wales's AI Institute. This could provide leverage for companies like Apple against dominant suppliers such as Samsung, SK Hynix, and Micron, helping to hedge against further price increases driven by shortages.

The appeal for CXMT chips is price.

— Sue KeayDirector of the University of New South Wales's AI Institute explained the market advantage of CXMT chips.

However, experts caution that even if CXMT successfully eases supply pressures, it doesn't guarantee cheaper consumer devices or memory chips. CXMT, or ChangXin Memory Technologies, is considered a "key pillar" in China's strategy to achieve chip industry self-sufficiency. "CXMT will allow China to reduce dependency on Korea and the US," Dr. Keay stated. Founded ten years ago with state backing, CXMT is now the world's fourth-largest DRAM chip producer, holding about an 8% market share, trailing South Korean giants Samsung and SK Hynix, and U.S. firm Micron.

CXMT will allow China to reduce dependency on Korea and the US.

— Dr. KeayDescribing the strategic importance of CXMT for China's ambition to build a self-sufficient chip industry.
DistantNews Editorial

Originally published by ABC Australia in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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